US $30 Billion China Fund Suddenly Announced Redemption? UBS Asset Management'S Exclusive Response To 21St Century Economic Report: No Change In Portfolio Size

Can foreign investors change into a shares?

Recently, the industry suddenly hears that the Chinese fund managed by a large foreign-funded institution holding a large number of white horse shares has been redeemed by clients.

It is said that the size of the fund is expected to reach $30 billion, and is speculated to be UBS group.

In response to this rumor, UBS asset management personnel exclusively responded to the 21st century economic news reporter: "there has been no abnormal change in the total asset size of our China portfolio. At present, the scale change of investment portfolio belongs to normal business scope. The change of asset management scale also partly reflects the market trend of China's onshore and offshore markets. By the end of June 2021, the total management scale of China's stock team has exceeded US $36 billion. "

In fact, since the beginning of this year, the four China funds owned by UBS group, including the largest China Opportunity Fund (UBS) Equity Fund China opportunity, UBS (Lux) equity Great China, UBS (Lux) es all China fund and UBS (Lux) China Opportunity Fund, have all had negative returns. Among them, China opportunity fund lost 8.2% and lost the most.

The founder of a private equity fund in South China believes that if the private placement products of UBS asset management (Shanghai) adopt the same operation strategy, the short-term performance may be under pressure.

Top 100 billion investment in China

UBS asset management is one of the first foreign investors to enter China.

As early as 1989, UBS set up representative offices in Beijing and Shanghai.

Subsequently, UBS created several "firsts" of foreign institutions: in 2003, it became the first foreign institution to obtain the qualification of qualified foreign institutional investor (QFII); In 2005, it became the first foreign financial institution to hold 49% of the upper limit of equity of China's joint venture fund management company; In 2017, UBS asset management became the first international asset management organization to obtain China's private equity investment fund manager license and have the qualification limit of qualified domestic limited partners.

According to the latest data of China Fund Industry Association, UBS asset management (Shanghai) currently manages 15 funds with a management scale of 2-5 billion yuan, leading other foreign private placement.

It is reported that, because its global strategy team has many years of experience in investing in China in the international market, UBS's private equity products mainly include stocks, bonds, multi asset (asset allocation) and fof (fund in fund). The first private equity product issued was invested in a stock market, such as fundamental research, value judgment, etc The investment logic of products such as purchase and sale decisions is the same as that of overseas teams investing in the Chinese market.

Within UBS, Shi bin, the well-known head of China equities, has long managed a large number of overseas equity assets invested in China.

According to public information, Shi bin graduated from Fudan University and Duran University. He once worked in the head office of Bank of communications, Boshi fund, USAA Investment Management Inc., etc.

Shi bin joined UBS in January 2006 and has been managing the Greater China Fund since April 2006 for more than 15 years.

At present, Shi bin is in charge of a number of China Equity Strategy funds, with a total management scale of more than 21.7 billion US dollars (140.6 billion yuan), including the world's largest Chinese equity fund, namely, UBS (Lux) es all China fund of US $4.44 billion, and UBS (Lux) China a Opportunity Fund of US $3.79 billion.

Performance tested

Foreign capital has always been called smart money by the market. However, in last year's and this year's market, Chinese fund management companies have shown better performance returns in comparable overseas Chinese stock investment strategies.

According to Morningstar data, by the end of 2020, the three overseas Chinese equity funds of UBS assets failed to outperform their respective peer average.

Including the world's largest Chinese equity fund, UBS (Luxemburg) China Opportunity Fund, which was worth US $15 billion at that time. The U.S. dollar share of the fund will return 28.3% in 2020, far lower than the average return of 38.2% of China's equity strategy funds classified by Morningstar, and also lower than the 29.5% return of MSCI's China total net return index. And UBS (Lux) es all China fund, with a return of 28.5%, lagging behind the average of the same kind; UBS (Lux) China a Opportunity Fund, with a return of 37.1%, was lower than the average of 43.9% in the same period and the benchmark return of 40%. It is understood that the leader of the three products is Shi bin, head of China stock business and star fund manager of UBS.

As of July 8, the yields of these funds have been negative since this year.

Among them, China opportunity fund lost 8.2%, followed by UBS (Lux) China a Opportunity Fund, which lost 7.55% this year, and UBS (Lux) es all China fund lost 7.62% this year.

Among the top ten positions of UBS (Luxemburg) China opportunity stock fund, the top ten positions include Guizhou Maotai and Ping An Bank of a shares, Hong Kong shares of Ping An, China Merchants Bank, Hong Kong stock exchange, etc., as well as ADRs (American Depository Receipts) such as tal, Alibaba and Netease.

Tencent holdings is the largest heavy position stock of China opportunity stock fund, accounting for 9.91%, followed by TAL accounting for 7.91%, and Guizhou Maotai accounting for 5.98%.

Some people in the industry said that investors who bought Tencent shares this year have taken a roller coaster ride. After the Spring Festival, Tencent's share price has been retreating all the way. At present, it has fallen below the HK $550 barrier. In just five months, Tencent's share price has fallen by 31.7% from the peak of HK $773.9, and the total market value has evaporated by more than HK $2.3 trillion.

Moreover, this year's decline in Tencent's share price is not due to the company's fundamental problems, but because of policy supervision and market factors.

"Even the best fund managers have an accident." The founder of a private equity fund in Shenzhen said that the big probability of losing is related to the general stocks and Internet giants in education. Core assets are not going well this year. If the general trend goes down, the behavior driven by group capital will return to the mean value if it is divorced from the fundamentals for too long. However, there are also different views. Yang Delong, chief economist of Qianhai Kaiyuan, believes that since the Spring Festival, although many leading stocks have taken profits and fallen sharply, they have not changed the long-term investment value of high-quality leading stocks. In fact, in the process of our economic transformation, leading stocks with good performance have long-term investment value, and cracking down on illegal activities in the securities market has further enhanced the intrinsic value of value investment targets, making more funds realize that only by growing with great enterprises and allocating high-quality companies can they seize the opportunities of the mainstream market.

Still optimistic about core assets

At present, Shi bin will still adhere to the concept of bottom-up manager selection, long-term investment, and the distinctive style of ultra-low turnover.

In May, Shi Bin said that his views on consumption and health care were still positive. Comparing China's total savings with the valuation of the stock market, we can see that the capital allocated to the stock market is very small, so in the long run, the stock market is still quite attractive; The views on consumption and health care are still positive, and the financial industry is healthier and worth long-term investment.

Shi bin pointed out that the recent market correction provides a good opportunity to buy high-quality companies, and the consumption, health care and financial industry are his long-term investment directions. In the long run, focusing on the quality of the company and emphasizing discipline are the best ways to manage risks. Anti monopoly in China's Internet industry, which is concerned by the market, will not eliminate the competitive advantages of leading companies.

As for the regulation of off campus training institutions, Shi Bin said that the strengthening of supervision will help to eliminate the chaos in the industry and try to make the whole market segment develop more healthily. He believes that under the influence of the latest regulatory policies, some institutions with poor qualifications will be eliminated; On the other hand, demand is still there, and leading institutions will benefit from increased regulation.

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